Sensex up over 200 points, snaps two-day losing streak

By Indulal PM

A man looks at a screen across the road displaying the Sensex on the facade of the Bombay Stock Exchange (BSE) building in Mumbai February 6, 2014.

Reuters/Mansi Thapliyal/Files

REUTERS - The Sensex surged more than 200 points and Nifty also ended higher on Monday after two days of losses as software services exporters such as Infosys (INFY.NS) rallied on a weaker rupee while lenders gained a day before the RBI's policy review.

However, sentiment remained broadly cautious after foreign investors sold a net $175.73 million worth of shares on Friday, the third straight session of net sales that totalled $494.7 million.

Investors will be closely eyeing the Reserve Bank of India's policy review on Tuesday. The central bank is widely expected to keep interest rates on hold, but analyst say it may loosen tight cash conditions by easing mandatory bond requirements for lenders among other potential measures.

Global factors will also be critical after sharp falls late last week. In India, the Nifty fell 2.4 percent over the previous two sessions to end on Friday at its lowest close since July 15.

"Symptoms are all positive only. But everything depends on the RBI policy, which will pave the direction for the short-term. Outlooks remains firm and it's still a buy-in-dips market," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.

The broader Nifty ended up 1.07 percent at 7,683.65, while the Sensex gained 0.95 percent to 25,723.16.

Shares in software services exporters gained after the rupee last week posted its biggest weekly fall since record low levels in August last year.

The local currency rebounded slightly on Monday but was still trading weaker than 61 per dollar.

Lenders gained on hopes the RBI would announce measures to ease tight liquidity conditions and take action to help spur lending. State Bank of India ended up 1 percent, while ICICI Bank Ltd (ICBK.NS) closed 1.1 percent higher.

Upstream oil and gas companies also gained, with Indian Oil Corporation (IOC.NS) up 4.4 percent and Bharat Petroleum Corp Ltd (BPCL.NS) higher 4 percent, as brent crude fell to its lowest settlement since April 2 on Friday.

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The BSE Sensex posted its worst monthly fall in more than two years, raising concerns a strong rally that saw indexes surge in the fiscal year was waning due to concerns about stock valuations and a more gradual economic growth. Full Article